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S&P 500 ekes out record close, Cisco falls on cautious outlook
14-Nov-19 16:20 ET
Dow -1.63 at 27781.87, Nasdaq -3.08 at 8479.02, S&P +2.59 at 3096.63

https://www.briefing.com/stock-market-update

[BRIEFING.COM] The S&P 500 (+0.1%) eked out another record close on Thursday despite Cisco Systems (CSCO 44.91, -3.55, -7.3%) dropping more than 7% after it issued downside quarterly guidance. The Dow Jones Industrial Average (unch), Nasdaq Composite (unch), and Russell 2000 (unch) finished closer to their flat lines.

Cisco blamed familiar macro uncertainties like Brexit and trade for its cautious outlook, but investors construed the situation as a company-specific issue. The broader market held steady throughout the morning, until shares of Walmart (WMT 120.65, -0.33, -0.3%), which were up more than 3% on positive earnings results and an upbeat outlook, turned negative.

The turnaround in Walmart shares coincided with a measly 0.4% decline in the S&P 500 before the benchmark index mustered its way back into positive territory by late afternoon. The real estate sector (+0.8%) led the comeback effort amid another decline in Treasury yields, while the energy sector (-0.3%) fell behind amid lower oil prices ($56.76, -0.32, -0.6%).

The 2-yr yield declined five basis points to 1.58%, and the 10-yr yield declined six basis points to 1.82%. The U.S. Dollar Index declined 0.2% to 98.17.

Demand for Treasuries may have been driven in part by continued misgivings about a "Phase One" trade agreement, which the U.S. and China are struggling to complete, according to a new report from The Financial Times. The stock market, though, remained undeterred by any negative-sounding trade news that doesn't come directly from President Trump, China, or top negotiators.

Today also featured notable analyst recommendations. Apple (AAPL 262.64, -1.83, -0.7%) was downgraded to Sell from Hold at Maxim Group, which may have contributed to a slight pullback in the stock. Kraft Heinz (KHC 30.96, -1.94, -5.9%) was downgraded to Sell from Neutral at Goldman, which certainly dragged the stock lower.

Separately, Fed Chair Powell's final day of testimony on Capitol Hill went largely unnoticed due to it being a reiteration of what the market already knows about monetary policy and the economic outlook.

Reviewing Thursday's economic data, which included the Producer Price Index and the weekly report for Initial and Continuing Claims:

The Producer Price Index for final demand jumped 0.4% m/m in October (Briefing.com consensus +0.3%) while the index for final demand, less food and energy, rose 0.3% (Briefing.com consensus +0.2%). The yr/yr change for these measures checked in at 1.1% and 1.6%, respectively, versus 1.4% and 2.0% in September.
The key takeaway from the report is that its surprise potential was mitigated by the prior release of the CPI data; moreover, the monthly headline surprise was neutralized by the year-over-year deceleration seen in the changes for total PPI and core PPI.
Initial claims increased by 14,000 to 225,000 (Briefing.com consensus 214,000) for the week ending November 9. Continuing claims for the week ending November 2 decreased by 10,000 to 1.683 million.
The key takeaway from the report is the recognition that the variance in the weekly initial claims number wasn't enough to change the otherwise supportive trend in the four-week moving average in a material way.

Looking ahead, investors will receive the following economic reports on Friday: Retail Sales for October, the Empire State Manufacturing Survey for November, Export and Import Prices for October, Industrial Production and Capacity Utilization for October, and Business Inventories for September.

Nasdaq Composite +27.8% YTD
S&P 500 +23.5% YTD
Dow Jones Industrial Average +19.1% YTD
Russell 2000 +17.8% YTD

Market Snapshot
Dow 27781.87 -1.63 (-0.01%)
Nasdaq 8479.02 -3.08 (-0.04%)
SP 500 3096.63 +2.59 (0.08%)
10-yr Note +28/32 1.822
NYSE Adv 1639 Dec 1225 Vol 719.0 mln
Nasdaq Adv 1437 Dec 1639 Vol 2.1 bln

Industry Watch
Strong: Real Estate, Materials, Consumer Discretionary
Weak: Energy, Information Technology

Moving the Market

-- S&P 500 ekes out another record close

-- Cisco Systems (CSCO) drops 7% on disappointing guidance; Walmart (WMT) gives up gains despite beating earning estimates and raising outlook

-- U.S. Treasuries extend weekly advance

WTI crude gives up intraday gain as inventories rise
14-Nov-19 15:25 ET
Dow -19.12 at 27764.38, Nasdaq -5.16 at 8476.94, S&P +0.19 at 3094.23

[BRIEFING.COM] The S&P 500 and Russell 2000 continue to trade unchanged.

One last look at the S&P 500 sectors shows the real estate (+0.5%) and materials (+0.4%) sectors outperforming the broader market, while the energy (-0.4%) and consumer staples (-0.3%) sectors underperform. The latter remains pressured by Walmart (WMT 119.78, -1.22, -1.0%).

WTI crude settled down $0.32 (-0.6%) to $56.76/bbl to give up an early intraday gain. Weekly crude oil inventories increased by 2.2 million barrels after increasing by 7.2 million barrels during the previous week.